Recent Consolidation of iGaming

Sky Betting and Gaming (SBG) is set to be sold to a Canadian company, The Stars Group, for a price of £2.5 billion. According to Stars Group, the completion of the deal will make it the largest publicly listed online company in the world. The company also owns PokerStars which is an online card room.

The Canadian Stars Group Incorporated announced in April 2018 that its board of directors has unanimously okayed a deal to purchase Sky Betting and Gaming Company. This means that the current owners of SBG, CVC Capital Partners and Sky will be the selling party in the transaction. The deal is expected to be completed in the third quarter of 2018 following a cash payment of $3.6 billion alongside the issuance of $1.1 billion in new common shares.

According to the article by Casinopånett.eu, SBG which is UK-based is currently engaged in a sponsorship deal worth millions of pounds with the English Football League. According to Rafi Ashkenazi, chief executive at Stars Group, SBG would complement the PokerStars’ platform and boost the group’s potential for growth. SBG operates vibrant sportsbooks and is also one of the U.K’s leading gaming providers, he noted. The acquisition is a landmark moment for the group, he added.

The details of the consolidation deal

Stars Group explained that the completion of the purchase will be conditional upon the receipt of approvals from both Nasdaq and Toronto Stock Exchange as well as several gaming and regulatory authorities.

According to Rafi Ashkenazi, following this transaction, the Stars Group will significantly enhance its scale and build a highly-regarded global brand and portfolio. As a result, the group is positioning itself to becoming the world’s favorite iGaming center.

The purchase of Sky Betting and Gaming will afford the Stars Group multiple operational and financial benefits including an increased presence in regulated European markets such as the U.K, said Stars Group. The group is confident that the deal will help it to diversify its sources of revenue even further. This is because a majority of its target revenue will come from sports betting.

Stars Group has said that it plans to use SBG’s offerings post-purchase as a ‘second low-cost customer acquisition channel’. This will be for the group’s core online poker services through effective cross-selling across multiple verticals.

In a statement from Sky Betting and Gaming, Richard Flint, CEO for the Leeds-based firm said that the SBG team is delighted to join the Stars Group. He further said that the consolidation transaction allows the company to offer the best-in-class products to a truly global audience.

The Stars Group acquires a majority shareholding at CrownBet

Earlier in March this year, The Stars Group announced that it had acquired a 62% majority shareholding at CrownBet Holding Pty Limited for $117.7 million. According to the Australian Financial Review, the Stars Group in a statement to the Toronto Stock Exchange said that it had increased its unaudited annual revenues from around $76.5 million in 2015 to $204 million in 2017. The group added that its unaudited earnings before interest, tax, depreciation and amortization (EBITDA) were negative $7.9 million in 2017. According to the group, this was the first time its EBITDA was in the red.

According to Ashkenazi, CrownBet has over time become the fastest growing online sportsbooks in Australia because it has a strong management team. CrownBet success was also contributed by mobile app, unique partnerships, marketing-leading loyalty program and proprietary technology, he added.